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What costs are capitalized, or added to the asset account when acquiring property and equipment? A. Only the ticketed list price of the asset purchased. B. Any cost that is considered normal and necessary to get the asset into position and condition to be used. C. The lower of cost or net realizable value. D. Any of the above are allowed by U.S. GAAP as the cost to capitalize when acquiring property

What costs are capitalized, or added to the asset account when acquiring property and equipment? A. Only the ticketed list price of the asset purchased. B. Any cost that is considered normal and necessary to get the asset into position and condition to be used. C. The lower of cost or net realizable value. D. Any of the above are allowed by U.S. GAAP as the cost to capitalize when acquiring property

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What costs are capitalized, or added to the asset account when acquiring property and equipment?

A. Only the ticketed list price of the asset purchased.

B. Any cost that is considered normal and necessary to get the asset into position and condition to be used.

C. The lower of cost or net realizable value.

D. Any of the above are allowed by U.S. GAAP as the cost to capitalize when acquiring property and equipment.

Expert Solution
Step 1

Introduction:-

Purchase price of plant and equipment consists of purchase price and all other costs relating to asset as follows:-

  • Transportation
  • Installation
  • Delivery etc..

 

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